APPRAISAL REPORT HOLIDAY INN EXPRESS LOCATED AT 11818 MIAMI STREET OMAHA, NEBRASKA 68164 AS OF: NOVEMBER 21, 2017 PREPARED FOR: MR. WILLIAM M. LIEN VICE PRESIDENT CREDIT ADMINISTRATION CORNHUSKER BANK P.O. BOX #80009 LINCOLN, NEBRASKA 68501 PREPARED BY: MR. DENNIS J. KNUDSON, MAI KNUDSON APPRAISAL SERVICES 13425 “A” STREET SUITE #11 OMAHA, NEBRASKA 68144 KNUDSON APPRAISAL SERVICES 13425 “A” Street Suite #11 Omaha, Nebraska 68144 (402) 932-4959 – Office (402) 320-2581 – Cell [email protected] December 7, 2017 Mr. William M. Lien Vice President Credit Administration Cornhusker Bank P.O. Box #80009 Lincoln, Nebraska RE: Appraisal Report Renovated Holiday Inn Express Located at 11818 Miami Street Omaha, Nebraska 68164 Dear Mr. Lien: In accordance with your request, I have appraised the above captioned property. The property is legally described within this report. In making this appraisal I have considered the pertinent data applicable to the appraised property. As a result of my analysis of the factors influencing this valuation, it is my opinion that the market value of the subject property in fee simple estate, subject to my underlying assumptions and limiting conditions, and my certification, as of November 21, 2017, is as follows: “ As Stabilized ” Furniture, Fixtures & Equipment (FF&E) $ 800,000 Real Estate $ 7,200,000 Total Realty Value $ 8,000,000 It is estimated that it will take approximately one (1) year to reach stabilized occupancy. Therefore, the “As Complete” value or alternatively, “As Is” value is discounted 1 year at 10%. Therefore, the following applies: “As Stabilized” Value $ 8,000,000 Discount Factor @ 10% for 1 Year . 9091 “As Complete” Value $ 7,272,800 Called $ 7,300,000 Page -2- Mr. William M. Lien Cornhusker Bank The attached report sets forth my reasoning and methodology in arriving at the preceding conclusion of value. Respectfully submitted, Dennis J. Knudson, MAI Nebraska General Certified Appraiser CG920136 APPRAISAL REPORT TABLE OF CONTENTS Page Assumptions and Limiting Conditions . i I. INTRODUCTION Summary of Relevant Data and Conclusions . 1 Scope of the Appraisal . 3 Purpose of the Appraisal. 3 Definition of Market Value. 4 Property Rights Appraised . 4 Function of the Appraisal . 4 Identification of the Property . 4 Owner of Record. 4 Effective Date of the Appraisal . 5 Legal Description . 5 Taxes and Assessments. 5 Zoning. 5 Floodplain . 6 Other Pertinent Environmental Information . 6 Utilities . 6 History and Current Status of Subject Property . 6 Marketing Time . 6 Building Accessibility Requirements . 7 Intended Use . 7 Competency Provision . 7 Prior Assignment Disclosure . 8 II. PROPERTY DESCRIPTION Neighborhood Description . 9 Site Description. 11 Description of Improvements . 13 III. VALUATION Highest and Best Use . 18 Appraisal Process . 22 Cost Approach . 24 Sales Comparison Approach. 51 Income Capitalization Approach . 80 Reconciliation and Final Estimate of Value . 90 TABLE OF CONTENTS (CONTINUED) IV. CERTIFICATION AND QUALIFICATIONS Certification of the Appraiser . 94 Qualifications of the Appraiser . 95 V. ADDENDUM Letter of Engagement Nebraska General Appraiser Certification for Dennis J. Knudson Historical Income and Expenses 2016 Owners Five Year Projection Site Plan Omaha & Vicinity Map GO, General Office Zoning Regulations Zoning Map Flood Plain Map Plat Map Comparable Land Sales Map Comparable Improved Sales Map Comparable Rentals Map Interior / Exterior Photographs of Subject Property ASSUMPTIONS & LIMITING CONDITIONS ASSUMPTIONS AND LIMITING CONDITIONS In conducting this appraisal I have assumed, except as otherwise noted in this report, the following: 1. Title is marketable and free and clear of all liens, encumbrances, encroachments, easements and restrictions. The property is under responsible ownership and is available for its highest and best use. 2. There is no existing judgments or pending or threatened litigation, which could affect the value of the property. 3. There are no hidden or undisclosed conditions of the land or of the improvements which would render the property more or less valuable. 4. The revenue stamps placed on any deed to indicate the sale price is in correct relation to the actual dollar amount of the transaction. 5. The land and improvements are in compliance with all applicable building, environmental, zoning and other federal, state and local laws, regulations and codes. The report is subject to the following limiting conditions, except as otherwise noted in the report: 1. An appraisal is inherently subjective and represents only an estimate of a property's market value. 2. The conclusions stated in the appraisal apply only as of the date indicated and no representation is made as to the effect of subsequent events. 3. No changes in any federal, state or local laws, regulations or codes (including, without limitation, the Internal Revenue Code) are anticipated. 4. No environmental impact studies were either requested or made in conjunction with this appraisal and I reserve the right to revise or rescind any of the value opinions based upon any subsequent environmental impact studies. If any environmental impact statement is required by law the appraisal assumes that such statements would be favorable and will be approved by the appropriate regulatory bodies. 5. By reason of this assignment I am not required to give testimony or to be in attendance in court or any government or other hearing with reference to the property without written contractual arrangements having been made relative to such additional employment. -i- ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 6. I have not made a survey of the property and assume no responsibility in connection with such matters. Any sketch or survey of the property included in this report is for illustrative purposes only and should not be considered to be accurately scaled for size. The appraisal covers the property as described in this report and the areas and dimensions set forth herein are assumed to be correct. 7. No opinion is expressed as to the value of subsurface oil, gas or mineral rights, if any and I have assumed that the property is not subject to surface entry for the exploration or removal of such materials, unless otherwise noted in the appraisal. 8. No responsibility is accepted by me for considerations requiring expertise in other fields. Such considerations include but are not limited to, legal descriptions and other legal matters, geologic considerations, such as soils and seismic stability, and civil, mechanical, electrical, structural and other engineering and environmental matters. 9. The distribution of the total valuation in this report between land and improvements applies only under the reported highest and best use of the property. The allocations of value for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used. This appraisal should be considered only in its entirety. No part of this appraisal is authorized to be utilized separately or out of context. 10. No part of this report (especially any conclusions as to values of the property or the identity of the appraiser) is authorized to be disseminated through advertising media, public relations media, news media or any other means of communication (including without limitation prospectuses, private offering memoranda and other offering material provided to prospective investors) without the prior written consent of the appraiser. 11. Any information, estimates and opinions contained in this report, obtained from sources outside of this office are assumed to be reliable and in some cases have not been independently verified. 12. Any income and expense estimates contained in this appraisal are used only for the purpose of estimating current market value and do not constitute predictions of future operating results. 13. No assurance is provided that the methodology and/or results of the appraisal will not be successfully challenged by the Internal Revenue Service. In particular, the methodology for appraising certain types of properties. -ii- ASSUMPTIONS AND LIMITING CONDITIONS (CONTINUED) 14. If the property is subject to one or more leases, any estimate of residual value contained in the appraisal may be particularly affected by significant changes in the condition of the economy, of the real estate industry, or of the appraised property at the time the leases expire or otherwise terminate. 15. No consideration has been given to personal property, which might be located on the premises or to the cost of moving or relocating such personal property; only the real property has been considered, unless otherwise stated. 16. The current purchasing power of the dollar is the basis for the value stated in this appraisal; I have assumed that no extreme fluctuations in economic cycles will occur. 17. The value found herein is subject to these and to any other assumptions or conditions set forth in the body of this report but which may have been omitted from these Underlying Assumptions and Limiting Conditions. 18. The analysis contained in this report necessarily incorporates numerous estimates and assumptions regarding property performance, general and local business and economic conditions, the absence of the material changes in the competitive environment and other matters. Some estimates or assumptions however, inevitably will not materialize and unanticipated events and circumstances may occur; therefore actual results achieved during the period covered by my